An FTA survey has suggested that demand for freight is growing in spite of soaring oil prices.

Thr Freight Transport Association's Quarterly Transport Activity Survey showed strong growth in freight demand despite record oil prices.

The figures paint a significant turnaround for the industry, which in 2005 recorded dwindling freight demand, particularly for haulage services as weaker levels of business caused a decrease in use of third-party carriers.

The increase has also reached other areas: international haulage by UK vehicles grew in the first half of 2006 following two years of sustained loss of market share, and short sea shipping routes to and from mainland Europe as well as inbound freight movements on deep sea shipping routes from the Eastern Asia and Western Asia, also grew.

Simon Chapman, FTA's Chief Economist said business sectors in Scotland and the Midlands were particularly positive: “The steady growth in the UK's GDP during 2005 belied difficult trading conditions in industries on which the freight transport industry depends - notably in agriculture, quarrying, manufacturing and construction. Most sectors report renewed optimism for Q3 2006, most notably construction and retail. The improvement in business conditions covers all geographical areas of the UK, although it is in Scotland and the Midlands where business optimism is most widespread.

“Strong performance in the short sea sector and better news at last from UK-based international hauliers reflects steadily rising economic growth in key European export markets such as France and Germany. Whether the improved fortunes of UK international hauliers can be sustained is less clear. East European hauliers with a markedly lower cost base compared to UK carriers continue to make major inroads into the cross-Channel road freight market. In the space of three years, the number of hgvs from new member states has increased threefold.

“Deep sea import traffic growth remains the consistently good news story for rail freight. Rail freight movements of intermodal containers have grown at an average annual rate of 9.5 per cent in 2005/06. 37 per cent of all inland freight moved in maritime containers is consigned by rail.”

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